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There was a famous Broadway musical back in the 1950s (and NO I am not old enough to remember it from back then!) called Pajama Game. The show stopping number was called Steam Heat — and the number and show helped to make Shirley Maclaine a star!

These days the word “steam” evokes a whole different image. Ask my son who is the expert on all things gaming (as are most teen boys). Steam is a platform developed by Valve Corporation. It lets users download games (and in October 2012 Valve expanded the service to include non-gaming software). In our tech world, Steam gives access — digital distribution, digital rights management, multi-player and communications.

If you haven’t heard of Steam before — it will probably become part of your life in the near future.

Remember the X-Box from Microsoft? The X-Box (the current one is called the X-Box 360) is a video gaming brand created by Microsoft. It includes a series of video game consoles, the latest of which will be the X-Box One. Kids all over the world love the X-Box because they can not only play games on it, but they can play games with others from around the world using something called X-Box Live. Xbox Live costs about $60 a year and for that fee you subscribe to a service that lets you stream multimedia content from PCs, purchase and stream music, view TV programs and films through the Xbox Music and Xbox Video services, along with access to third-party content services through third-party media streaming applications. Microsoft does offer a free X-Box Live, but functionality is very limited — it lets you get to the store so you can actually pay for stuff (hmmm, and the ability to shop is free, how ironic is THAT?) and you can play demo games to see if you want to buy them. As I said the free version is very limited.

X-Box took over the gaming world in a big way — thanks in large part to the multi-player gaming abilities of X-Box Live (not to mention some killer shooting games). . . But thanks to Steam this reign may be about to end.

Steam now has more than 65 million active accounts. 65 million! This is a 30 percent rise in players in just the last year. On any given day Steam may have more than 6 million concurrent users. Microsoft’s X-box Live has 48 million accounts — around half of whom reportedly paid extra for a gold subscription.

Steam has 17 million more accounts than Microsoft’s X-Box Live!

I can almost hear 17 million voices crying out “In your face Microsoft!”

Poor Microsoft, once the king of technology the iPad and Google Android tablets are sucking life out of its key computing model, and now Steam is taking a bite out of its lauded gaming throne!

Steam is not new. Steam has been around for 10 years. There was a time I hated Steam because of the complexity it took to download games — if they even worked at all after you went through the trouble to download Steam and then download a game. . .

Ten years is a long time in tech years. Most tech companies who survive that long have come to prominence and then decline — if they ever became a leader in the first place.

The success of Steam in keeping up with technology and even leading it contrasted with so many high tech companies who lay in the graveyard of technology past brings to mind Crossing the Chasm by Geoffrey A. Moore and Regis McKenna. The concept of the chasm of dead products that either never make it to main stream or hit it and then rapidly die out was brilliant. Moore and McKenna said there is a chasm between the early adopters of a new technology product, mainstream users — and then finally the late adopters. In the “old days” a product could be designed and last a lifetime (more than a lifetime — think of something like a shovel or a hammer — how long have those tools been around). Now think about how Math technology went from a slide ruler to a calculator to Lotus 1-2-3 to Microsoft Excel to an app on your cell phone or tablet. . . That product life cycle just gets faster and faster — and companies rise and fall so rapidly it makes your head spin!

Valve is innovating so it shouldn’t fall into the chasm any time soon. Valve (owner of Steam) announced a new operating system. SteamOS is a Linux-based (bypassing Microsoft) operating system — a navigation solution for gaming PCs in the living room. It can be installed on any PC (and it’s free). SteamOS will be the operating system powering the physical Steam Machines that Valve will soon be shipping to eager gamers. The Steam Machine is supposed to be its ability to stream games from your regular gaming PC to any TV.

Valve also announced a new game controller. The Steam Controller has two clickable high-resolution circular track pads with haptic feedback, which supposed to be precise enough to match gaming keyboards and gaming mice.

Time will tell if Steam will continue to steam roll over its competition — but our high tech world keeps on a changing!

My last blog posed the question: “Is Microsoft the next Dinosaur?” My point was that most companies have a lifecycle, just like products do and people do.

Microsoft may or may not be at the precipice of a decline — it is really up to Microsoft. The thing I always admired about Bill Gates in the “early days” (and I was a UNIX fan since I worked for AT&T Computer Systems) was that he was always paranoid. He knew the internet could eclipse the OS as far as the center of the IT universe and so out came Internet Explorer. Microsoft tried to win the search engine war — and after repeated lack of success has what looks like a nice product in Bing.

But no sooner did I post my Blog and get lots of comments (most not so nice from Microsoft proponents) along comes PC World with an article that asks the very same question I asked:

Analysis: GM’s bankruptcy marks the end of an era. Is Microsoft repeating the automaker’s mistakes?

J. Peter Bruzzese, InfoWorld

// Jun 3, 2009 6:00 pm

“Microsoft has faced a few serious bumps over the last 10 years but came out fine. . .Knowing the work Microsoft developers put into their products, I believe they are the saving grace of the company — as long as they are allowed to hear the voice of the people. This is an area where I’ve seen a problem.”

I worked for AT&T at the hey day of Bell Labs. We had the brightest, most awesome minds around — just like Microsoft does today. Microsoft ca be its own best friend or its own worst enemy. Only time will tell.